September 14, World (LNW): International crude prices climbed sharply on Monday as a fresh wave of attacks in the Middle East heightened fears of further disruption to global energy supplies.
Brent crude rose by $2.90, or 2.77 per cent, to $107.51 a barrel by 2313 GMT, while US West Texas Intermediate gained $2.27, or 2.27 per cent, to reach $102.32. Both benchmarks had advanced by more than 3 per cent earlier in the session.
The latest increase followed reports of renewed Houthi attacks in Saudi Arabia and an incident involving a commercial vessel in the Gulf, adding to market anxiety after a key Saudi oil pipeline was taken offline.
Saudi state media released footage showing damage to residential buildings and a mosque in the southern Jazan region, which authorities attributed to a Houthi strike. The Iran-aligned group also claimed to have targeted a Saudi military installation in a nearby province.
Tensions extended into the strategically vital Strait of Hormuz, where the UK Maritime Trade Operations agency reported that a vessel had been hit by a projectile and caught fire. The crew was subsequently evacuated. Iranian authorities separately reported that an Iranian commercial ship had come under attack off the country’s coast, leaving one person dead and four crew members injured.
Markets were already bracing for higher oil prices following Friday’s drone attack on Saudi Arabia’s East-West pipeline, which resulted in the crucial route being shut. The pipeline provides Saudi Arabia with an alternative means of moving crude to export terminals while avoiding the Strait of Hormuz.
The disruption has raised concerns over the potential loss of as much as 4 per cent of worldwide oil supplies. At the same time, the strategic Bab el-Mandeb waterway has come under additional pressure following reports that Yemen’s Houthis reached the island of Perim, potentially strengthening their position around another major shipping corridor.
The combined developments pushed crude prices more than 8 per cent higher over the week, with oil moving above $100 a barrel for the first time since July.
Analysts warned that prices could climb further if the Saudi pipeline remains out of service and diplomatic efforts fail to ease tensions. IG market analyst Tony Sycamore said crude could potentially approach its early-March peak of $119.48 if there is no meaningful progress.
Hopes for a diplomatic breakthrough also suffered a setback after Oman’s Foreign Minister Badr Albusaidi announced that a planned meeting between Gulf states and Iran over the Strait of Hormuz had been postponed.
The latest escalation comes as the wider conflict enters its sixth month, with no substantive peace negotiations taking place since an interim agreement reached in June broke down after only a few weeks.
